Commercial activities and types of contracts. Other Forms of Basic Activities. Steps to Conclude a Contract, страница 3

 A leaseis a contract giving the right to use land or buildings for a set period, in return for payment of rent, i.e. it is an agreement between the lessor (the owner of the property) and the leaseholder (the person who wants to use it).

 Tolling is a kind of joint production when one company works on the raw materials of the partner.

        Consignation is providing the goods by the exporter to be sold by the importer. The exporter still remains the owner of the goods. The importer does not own the goods but is responsible for their safety.     

    Futures are trade in futures contracts to buy and sell standardized class of commodities at a stated price at some fixed time in the future.

The exporters can assign their obligations and sell trade debts to the factor (a factoring company), usually a subsidiary of a major clearing bank, and be no longer involved in the countertrade transaction. In return, the factor provides the exporters at once with cash up to 80 % of the face value of the debts charging, of course, a fee for the services and sometimes demanding a bank guarantee from the exporter.  

Factoring the business of purchasing debts from clients at a discount and making a profit from their collection.

Licence Agreements

Licence agreements stand apart from all the above contracts because they do not deal with selling and buying physical goods but with the sale and purchase of ideas, scientific-technical knowledge in the form of licences, patents and know-how. As a rule, there are practically no standard licence agreements.

The patent issued for the invention gives its owner the right to produce, use or sell the products on the monopoly basis of the invention or specific methods of their production. If the patent owner in consideration of payment transfers the complete ownership of the patent on the invention to another person, i.e. the full rights to use his invention, then it is the sale of patent on the basis of a patent agreement. If the patent owner retains the right of ownership of the invention and only permits in consideration of payment to use this right during a certain period of time, then it is the sale of a licence for the use of the invention on the basis of a licence agreement.

Classification of Licence Agreements

International licence agreements may be classified according to their subject, according to the volume of rights transferred and according to the methods of safeguarding the subject of the licence agreements.

 The subject of the licence agreement may be inventions, industrial samples and the right to use them and trademarks, know-how and scientific-technical and other knowledge associated with them and required to realize the aims of the licenсe agreements. The licence agreements may be classified accordingly.

According to the volume of the rights transferred there may be three types of licences:

1) Simple (standard, non-exclusive) licences when the licensor permits the licensee on certain conditions to use the subject of the license agreement, retaining the right to use it himself or to transfer licences on similar conditions to any other persons (firms) concerned.

2) Non-standard (exclusive) licences when the licensor gives the licensee the exclusive (monopoly) right to use the subject of the licence agreement on the conditions specified and limited geo­graphically. In this case the lisensors have no right to use the licence in the licensee's country themselves or to sell it to third persons, which excludes any competition in the market of the licensee's country.